New Millennium Iron Corp. Responds to Dissident Shareholders’ Claims
Calgary, Alberta – December 21, 2015 – New Millennium Iron Corp (“NML” or the “Company”) (TSX:NML) CEO Robert Patzelt issued the following statement on behalf of the Company’s Board of Directors in response to a number of claims made by a group of dissident shareholders who have a requisitioned a special meeting of shareholders with the aim of replacing all of NML’s independent directors and, in turn, setting a new, yet undefined direction for the Company:
“The past two years have been among the most challenging ever for the iron ore industry. Iron ore prices have plunged, due primarily to weaker demand in China at a time when significant new supply from previously committed projects in Australia and Brazil continues to flood the market. Combined, these factors have resulted in weak financing conditions and sharp declines in share prices for all mining companies.
“Against this background of unfavorable conditions and negative market sentiment, NML has transitioned from mainly an exploration company to one in the development stage, through investment in a direct shipping ore project, comprehensive feasibility studies on two taconite deposits and the successful definition of further large NI 43-101 taconite resources. This record is unique in the Labrador Trough’s junior mining sector.”
“NML’s present strategy is designed to maintain this momentum while preserving working capital, its asset base and its reputation with various stakeholders in the Labrador Trough as a company committed to building a successful and responsible iron ore business.”
“Our plan to optimize the development of NML’s taconite properties using transferable know-how from the previous feasibility work in order to arrive at an appropriately sized and competitive project capable of servicing the high-quality segment of the iron ore market is adaptive, and we are only carrying out essential work to make this project concept ready and reduce lead times for market entry as conditions permit.”
“To efficiently implement this strategy we have a streamlined new generation of management in place with considerable experience across the necessary iron ore industry disciplines. Our continuing Board renewal initiative has resulted in the appointment of three highly qualified, independent directors with proven mining industry, capital markets, fund-raising and corporate governance experience that will further support our drive to build shareholder value.”
“We also maintain a strong, ongoing commitment to preserving capital with significant reductions in operating expenses achieved as a result of two restructuring initiatives and continued cost cutting, leaving us a strong balance sheet and considerable financial flexibility through at least 2018. During that period, we will continue to closely monitor market conditions with a view to adjusting our strategy to preserve and grow shareholder value, as required.”
“We firmly believe the direction we are taking will enable NML to progress even under present industry circumstances. We find the position taken by the dissident shareholders to be unwarranted and misleading. Nevertheless, the Company formed a special committee that will examine the claims of the dissident shareholders more closely and develop recommendations as appropriate. In this regard, we regret that our approaches to date to discuss their concerns have been unsuccessful.”
As previously announced (please see NR 15-19 dated December 14, 2015), NML has scheduled a Special Meeting of shareholders for March 15, 2016, in Toronto. In advance of the Special Meeting, the Company will send a Management Information Circular to shareholders that will formally respond to the position of the dissidents, and provide information on its strategic direction in greater detail.